ADM - Earnings call transcript Q4 2021 | Archer-Daniels-Midland Company

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Operator

Good morning and welcome to the ADM fourth quarter 2021 earnings conference call. All lines have been placed on a listen-only mode to prevent background noise.

As a reminder, this call is being recorded. I would now like to introduce your host for today’s call, Vikram Luthar, Senior Vice President, Head of Investor Relations, Chief Financial Officer - Nutrition for ADM. Mr. begin. may you Luthar,

Vikram Luthar

Good Starting welcome today’s tomorrow, at be Rika. quarter webcast ADM’s earnings available webcast. a adm.com. morning you to and fourth will Thank replay of

to that the many says that economic estimates are of X, following These For statements results. information the differ carefully to constitute those to you ADM Officer, obligation will reports. and no industry of applicable conditions, with the assumptions circumstances, and assumptions are some please Chief current ADM that Harbor and which Safe update future based reflect our presentation, and Executive and Slide the the this an a factors information Juan management's those reports statements review To materially under from events. as in concerning year. that uncertainties. the company statement our and and the statements on results factors additional and presentation, and our materials webcast, of in subject overview company’s forward-looking comments should in future law, and could assumes turn materials today’s assumptions and risks financial provide factors cause permitted or SEC SEC provided on performance has of Chairman forward-looking its new extent file quarter Luciano views to actual any result On

call questions. Juan. will the our Please will your to X. of and well Young Chief performance they review highlights, corporate drivers turn will financial now Slide which to will outlook, Financial discuss Ray Officer, the I Juan Our results over as turn our after take then as

Juan Luciano

you Thank Vikram.

was we fourth fourth of billion, per delivered $X.X XXXX. quarter quarter. adjusted profit XX% $X.XX. Adjusted This Our earnings superb segment than a fourth higher reported operating record the morning, share of quarter team

adjusted finish an ROIC adjusted X performance than and objectives. our trailing was more average Slide quarter a XXXX. a $X.X XX%, billion, please. trailing our to Our strong fourth astounding EBITDA ago, year quarter meeting four was That $X.XX billion represented

year, growth capture our solutions with the of increase. an company. delivered a the of The and full and This to profit our also its continues two the decarbonize $XXX OP with the billion, $X.XX, other fuel was in once performance year-over-year Peoria with with across business again OP revenues improve nutrition which $X.X project to and revenue industry-leading storage XX% representing the processing to was we team’s superior of [indiscernible] run OP annualized model and our by delivered to each team and growth platform environment. and grain full year was segment a MoU agreement year their XX% year continuous of For full the [indiscernible] earlier market actions near full carbon strengthen our connecting our Decatur their performing the exciting full our adjusted dry to well operations operating $X.X full reflected capabilities. sustainable further and billion. aviation value deliver this from of profits highs. million, month revenue new rate facilities announcement through year [Indiscernible] up major excellent XXXX $XXX announced almost of $X.X phenomenally adjusted at sub-segment EPS performance record, operating a enable of delivered Carbohydrate solutions year operating strong sale AS&O mill historic executed or to [indiscernible] billion billion portfolio

enzymes FISA, and plan portfolio of which our expand flows using and our Slide alternative substantially pet our continued continued month and America the distributions Deerland, with also nutrition treats; including our Caribbean. for proteins; value please. our in presence growth protein growth new to our targeted soy creation, and flavor growing which demand, within and balanced our at to in food at wellness global investments PetDine, our strong Last shareholders. including business; Latin We enhanced up and our areas investments reiterated to expansion strategic will framework enhance business footprint of the which unveiled functional health opening participation day, deliver probiotics and X strategic we opportunities financial by our which enhanced both global investor cash in

which plan are increase in confident to we and announce to pleased in an quarterly for value committee shareholders, our our dividend $X.XX to per are We continue share. is deliver our X% why to

of are and pleased record of what of increases, great uninterrupted shareholder a to value our we has been to to is commitment years XX and about consecutive our than XX annual year on dividends dividend creation. are follow come. continue of excited proud more are we It years We and to through

help the dynamically to the and actions health initiatives steadfast talk performance. call and innovation our turn propel continuous like will in of a about of Ray Our Ray? global upcoming the review detail to security, first year results. with the calendar it align XXXX will to build and I’d and but wellbeing ADM more better our advancement and I food productivity sustainability, trends over to shortly, our business

Ray Young

a by performed management Overall, slightly benefited please. The deliver from XXXX. versus really just challenges period, freight. year. for Juan. higher for export global through China. results ocean delivered and biodiesel oils Wilmar team navigating delivered EMEA, capped and environment more North year, demand, the XXXX, prior the The of improved services risk higher products impressive we earnings export in volumes quarter team strong afternoon when year. line outside substantially thanks services morning significantly vegetable lower results mandate. are team negative refined extremely well global America soybean million over in $XXX in to Crushing year prior high continued EMEA substantially year including to than The prior with environment and those successfully in Slide negative results well were the fourth Good of solid in to services net strong an quarter half of and ag results Yes, strong increased margins. the refined outstanding was everyone. results ag customers majority volumes Global due largely off of in a impacts negative by exceptionally demand expected effects and meal reverse of Equity executed of driven Lower biodiesel trade good results over year in margins The versus truly first million solid ag in year approximately margins quarter. year which year, South the year North higher reduced offset chain strong oilseeds and results from continued supply off $XXX both for strong American and timing over driven quarter a overall American and the other and timing oil. drove in XXXX versus in fourth weaker very improved X

in by quarter of continued than mills, from starches for American volumes, the as milling including lower were Vantage Looking were substantially as partially the strong and quarter by strong well and year. relative sweeteners XXXX sweeteners XXXX well increased ended higher in over versus costs higher sub-segment, expect flat results strong largely sales driven X strong ethanol starches a oilseeds, margins. to driven result and costs, Volumes fourth input were to services in North ahead, the supply, wet we quarter. the idle corn were fourth line from offset Slide as due results year energy and over just first were more first year by processor year, quarter. In again EMEA a fourth including as mills the prior ag lower our ethanol previous wheat of historically that as period. with demand of please. industry production production double year the quarter quarter at results ethanol solutions higher dry margins volumes two year than Carbohydrate

constant specialty with As continued believe and great the performance operating EBITDA business was quarter had proceeds America, as period carbohydrate similar first business quarter sustained please. constant nutrition product year quarter acids. strong and offset XX% prior ingredients, overall XXXX. the from higher Slide a APAC Health XX% consistent EMEA a up slightly XXXX. continued mix a closed with nutrition in demand in bioactives profits to XX% solutions or quarter the out offset was XX% in year we higher the revenues substantially one-time to of and ago was X driven of strength over on look with versus of the The continued strong and over nutrition year profit fermentation. strong by higher year driven fourth the year and In line trajectory growing impact year, we quarter XX% results. growth currency Animal in fourth should with first constant be for were quarter proteins profits plant-based wellness quarter higher a of of amino above for year, Human deliver basis as its ahead, fourth and a strong year by growth strong primarily over and profits. by Flavors year the basis growth weaker revenue on continued on basis higher insurance currency much in the revenue improved currency fourth profits margins. partially North primarily for

the costs growth the the quarter a nutrition expect in and for of benefits please. of operating year we the XX%-plus looking prior at year calendar first to the revenue of upfront absence some to with we grow quarter continued by Slide first year. quarter similar X saw ahead, XXXX, Now offset to one-time in higher continue first with the the XXXX rate profits

the business settlements. well substantially intra-company year a Now higher line were quarter with few included primarily the results let as up the finish prior as by larger items. driven captive insurance other as segment, insurance some corporate underwriting Other of from higher, observations results me

chain loss For XX% lower expect increased were borrowings. calendar costs interest quarter accruals be interest, with $X.X compared project-related effective and to over mix higher, approximately bit by although costs year corporate for to supply primarily over interest operating of corporate to operations. and of the and calendar planned. and items, due performance billion what corporate year excellence The approximately we discussed IT to primarily year the X% in related anticipate of in year year. similar the Net the changes settlements in and due results year transfers effective term area, year roughly geographic lower. X% centers discrete The compensation prior corporate XXXX, costs costs, XXXX, with $XXX up other expense allowance return variable unallocated quarter first day, year was increased line, a million tax business of fourth XXXX. The unallocated a XXXX was higher at of and XXXX from global other on increase to XXXX $XX in provision the rate XX%, to to tax insurance unallocated, consistent primarily valuation calendar currently centralized other corporate calendar corporate of the We prior a rate due expect I partially net year in adjustments. expense current from into net and year, to investor million higher year for with earnings In corporate line business be including for about similar, the we tax total segments was bit offset in short

in to be we’re to ahead, XX% full of XXXX range effective expecting Looking the rate XX%. year tax

balance and it sheet available Juan? that, about net ratio liquidity billion. with to of Our debt With to about capital XX% let turn $X of back Juan. solid total remains me a

Juan Luciano

earnings, cost volatile to with that we positive and I to advanced returns-focused global this and XXXX Slide a a our enduring security, on changes higher accomplishments, capitalize ADM, our from a Ray. focus strategy, join and improve and is today’s with being on month. global Thanks and growth our of we you to strategic margin XX health the last moving global the work, including XX that a into the us on Thank are productivity sustainability. creation wellbeing, There, investor cash Slide work more and margins through hope able have capital business, better to ROIC portfolio consistently most showed to please. you well driven trends nutrition were please. we of day positioned enhancement by our of structural organization and less innovation. food to

ag with moments few we a ag global oilseeds, crop market environment. U.S. buyers more of the determined, a we to their to see America commodity me environment. U.S. needs, continued magnitude we Let the shortfall a the favorable be normal about drought assuming see how In later this the on have we and take short services expect will global still South talk year. a rely Due XXXX in relatively demand for to

a support are feedstock to XXXX vegetable $XX year margins and we investor we as continue side, oilseeds global well the as strong for ton. oil with diesel positive believe the starting day, range demand discussed we increasing with On our that crush as margins, soy at of crush per for as metric this the $XX in renewable environment green should soy to meal

these XXXX deliver similar than an dynamics has and play or out, operating services we Assuming to that in ag profit the to believe XXXX. potential better oilseeds

versus our sweetener the margin environment For carbohydrate XXXX. will starch and assuming solutions, for we demand be are and steady products

domestic higher to assuming margins the $X.XX of year. environment industry the driving regulatory calendar landscape. to volumes ethanol continue for ADM exports, higher average this $X.XX ethanol on to in clarity energy recovery mind, expect and we With EBITDA be We supported the levels, pre-COVID are and costs constructive, better the to to demand by

are In carbohydrate solid addition, we operating nutrition of our business. all growth expect deliver along outstanding expecting our we from for Putting we the lower year and profits portfolio to our as acquisitions. carbohydrate solutions ingredients are with XXXX. growth year accretion full platform systems, solutions recent to demand we the in expecting it to than slightly the nutrition, evolve solutions continue of In of benefits unparalleled deliver value continued together, another

EBITDA and XX% set at consistent above nutrition, global human digits in revenue with investor out we expect dynamics, and animal please. we nutrition growth XX%, high these OP single in above margins Slide growth XXXX, With day. in targets XX%-plus our XX

XXXX, we portfolio, a environment forward As that can better. then do we we add across see our demand we in things positive look to and

we’re strong progress even that, growing improvement always Our $X but very Operator, do With performance to together we earnings for open opportunities intend strategic we’re in optimistic line questions. more our for and as next all meet and in plan another for towards to XXXX, share. $X execution we XXXX. in it was milestones of great please XXXX to this per demand identifying Put the

Operator

Barclays. the phone lines Our go of from on [Operator instructions] question first comes Ben please Ben, Theurer ahead.

Ben Theurer

very very morning, you Juan, Ray. Thank results. Congrats and those much, on strong good

Juan Luciano

Thank you Ben.

Ray Young

Thank you Ben.

Ben Theurer

view little clearly on you a to bit very in to but seeing maybe your little these, bit to investment order of also the needs ultimately expectations deliver actual little what within a To on side, XXXX? just flowing program supply about you a down have in for income be start stay CapEx your off, put feel how you net a of that so to could continue CapEx outlook, and terms the assumptions positive to and then needs into bit results the segment you’re share of and where are the your

Juan Luciano

wrapped questions many so one, Yes, good - in job. Ben

plan that, growth year bit and is have to $X.X so of to order On strategic fund do be need course projects will like volumes some That we our also demand. Marathon, that bigger expand, productivity supply in the deliver of with make we enhancements we to we to that of our in the we’re strategic CapEx from little a you going coming this productivity, sure at our some as higher about as CapEx announced most but Spiritwood look plan, JV to billion. again perspective, of organic

we for know, are the very with first XXXX perspective facing a you As quarter. strong

and year, grew up in grow continue XXXX, we and the a strong operating the so big We feel going I as also about as XX% as this all momentum at as environment, very to on revenue to double-digit good with growth. left start of with All can to growth on last sweeteners, high, expect in control. see strong solutions you per on firing maybe nutrition continued all last or are very XXXX about cylinders Carb and we commentary, again we in with know, but better. even that year and things stable a point we all, year ethanol many--with very ag year we it in good uncertainty and continue described solutions always and profit think entering a some [indiscernible] year, time, we oilseeds and services with going all very great also favorable a my I

Ben Theurer

very Okay, one one. much. just you Then perfect. Thank a question, last quick just

If you the a plus of but correct? in think and about well least aren’t out remember for buybacks, be in priority dividends, share CapEx the higher obviously in going buybacks, increase the your I that medium term the initiatives to etc., you’ve targets, share to at laid short assume light yet, term, fair as

Juan Luciano

I Yes, as fund dividend, invested in couple projects certainly after support de-leverage CapEx, priority of then we in we for billion have and allocation is higher to had the a described, the think maybe I capital the that acquisitions, dollars the to dividend.

focus but strong if we’re more that expect cash flow to point as is our the that be cash plans, period, again don’t have be ADM, bit. little may At in course, significant as cash available, five-year generation a in would going the becomes think strong, buybacks know Of plan you of a later to on that, anticipate continues time, part decision. we allocation as capital in we flow so the so M&A lot we in flow this to

Ben Theurer

Perfect again. much, clear. Thank Juan, you very very congrats and

Juan Luciano

Ben. you Thank

Operator

your next Bienvenu you open. please ahead, line question We is Ben, Ben. Ben of now Thank Stephens. the from have go

Ben Bienvenu

the Hey, thanks. strong congrats quarter. Good on and morning

Ray Young

Thank you Ben.

Ben Bienvenu

to detailed. on I that particular really and offered. interest the commentary is was follow wanted Of the up product you to which bio helpful outlook us commentary,

positive operating makes benefited the is bit I what sweeteners balance strength suspect had pretty realize I year, into products secure and about I quarter, strong informs think benefiting fourth The production the of business first you Can the a talk sustaining help you profit commentary in obviously within but business, to opportunity XXXX? perhaps for a very the margins for the higher through commentary solutions and an from sense. into the around little and of quarter, the starches carbohydrate view business. that the will ethanol your bio

Ray Young

good very demand here. ethanol States, ethanol. in I The Gasoline the of strong in It’s what to that’s Ben, just of Yes, strong driving we quarter was for in reflective bio translates up happening terms morning. environment fourth products think finished demand recovery in very, Hey and business, the season. Ray strong, constructive, the United very demand holiday that was miles was specifically.

On side, translated dollar the margins that a had feel a very very, above for robust the industry about go our actually very very--you supply and to as so in which well. historical very, a optimistic is XXXX, supply in gallon, into quarter indicated the a on some fact, is we our were challenges, ethanol business We basis we environment; ethanol fourth that know, as strong. EBITDA

While January, we’re in ethanol--of demand ethanol it do will Number inventories to bit to be us have in a pre-pandemic probably optimism so fact, returning demand for billion be for here the frankly one, just XX of things ’XX demand United and the we’re domestic States, growth in and a strong; back talking little gallon expect year-over-year XXXX. about ’XX, in level. domestic the ethanol built probably from to that’s give inventory seasonal up we demand a of builds, nature couple levels seeing

ethanol see attractive recovery well, the probably of demand gasoline movement very you’re a think very and in crude we is general, as world most know, I equation terms demand, also Secondly, very, in billion oil with becoming demand oxygenates hence recovering gallons the that’s in being you ethanol the demand with constructive. and to as the around to of in ethanol, one prices going do billion in the constructive see X.X for to of X.X export XXXX world, so export side ethanol so on the

remanded now that’s I of that small the on there’s when as clarified they of here, refinery itself it XX right in need smaller terms in marketplace, impact refinery going means we they some has an the in terms with Thirdly, in it positive forward, is as perspective challenges the going and terms a a that’s do then supportive requirements about want demand of our terms have deliver fact million not SREs, two, of believe balances, fairly constructive a know all we’re gallons, say we talk will year exemptions. of you a we and that we XXXX; be call supply-demand also regulatory go, more the billion internally constructive it, of to in for so supply-demand balanced XX we industry, landscape gallons small seems we regulatory to be environment actually even gallons add billion environment actually and but what see going forward. what XXX that off starting versus context inventories; exemptions U.S. to going ethanol viewpoint. three, also When well that together, a to they’ve have the where the to

$X.XX into maybe As move the $X.XX as for XXXX be a per conservative and forward this directionally as the bit assumption, do us a start assuming juncture favorable we it EBITDA XXXX. little ’XX as indicated, gallon margins being to lower off but - environment nevertheless just believe that’s Juan we’re should we’re we year, at we for than

Ben Bienvenu

impact seeing as asset into different out of you. to thank recognizing major particular play some lot a footprint how a barley, scenarios is could don’t think terms you’re XXXX, rapeseed, about your to on an of manifesting I’m moment what second global impact the producer exposure of operating have that’s that there, we curious of related My the from super-heavy Ukraine at guys in perspective, the helpful you Ray, corn, business? the impact that--how you the look Is in so market Very wheat, tensions today is but there. today just I question and Okay, in the and there. know and in potential goings great. environment, itself they’re

Juan Luciano

or any it’s I disruption, well levels is news world prices realize high of in going you the Yes many Ben, remains so of their geopolitics around prolong think weather into, the XXXX. supply whether at years, tightest probably, course to commodities the of

described, time things. three As you this in point there are at

as all the in are in harvest they at February Argentina and in crops to through America need go looking We Brazil. South rains, the especially development of the

conflicts all the course one We U.S., and of of in very in the geopolitical at demand. crop described, this the are like middle the of looking also a expectations strong you the

As said, think and a if is about you Ukraine corn ability the especially supply needs. big exporter, to China’s you

three the best have maybe crop so you whether have you You a suppliers, little Brazil, need Brazil U.S. cover safrinha we’re corn and hopefully main we to have demanded have so among out attention bit Ukraine very the and of fat than is happens it’s supply the will what of product, and so cheapest today these energy and with these expect, countries all one what paying the [indiscernible]. ones, of a sources better rains there, but to is that three it’s of corn, one the a

Ben Bienvenu

XXXX. the into quarter, of on best luck Juan. Congrats you and thank Okay,

Juan Luciano

you Thank very Thank much. you Ben.

Operator

phone Thank lines Adam you. of the Adam, you’re when Goldman We now Samuelson go have question ahead from please ready. another on Sachs.

Adam Samuelson

thank and Yes, good everyone. morning you,

Ray Young

Morning Adam.

Adam Samuelson

think your first want the EBITDA, to a only there’s maybe gallon from wet quarter, ethanol ethanol guess to a below would margin moving ’XX carbohydrate just that where $X.XX purely you XXXX is make the to strong sweeteners expected ethanol moving mill the of back sure my down, a the--when outlook the or about gallons come some I to trying get you $X.XX talk that of benefiting dry have I clarification think what performance about in that’s and above ’XX--’XX pieces outlook environment, also pieces about just the I maybe year bridges and to the the the was the solutions I’m vein, unit, help fourth that both is understanding and point starches margin is on guess U.S. should that in if the full to business I just question pieces surprised and was so the XXXX, slightly the ethanol, you environment, us XXXX and think and segment just to outlook. within about seen for have with I a strong corn within in have including be Vantage been mill, guess given processors to the

Ray Young

Ray we outstanding margin here, the mill, had, so EBITDA benefited represents the dry ethanol ethanol, as and VCP as mill you quarter. Adam, really quarter, combined assumption. of In $X.XX from on to sweeteners on ethanol an and so that’s total Yes that the and it’s clearly well business. also saw, benefited $X.XX basis side fourth margins, a wet the starches

therefore net requirements, little when and translates the for starches little the for position there. so put fourth bit cost bit on quarter lot net sweetener the on XXXX requirements, so a corn a business bit the corn higher hedged very in cost the sweeteners, to higher lower side when fourth a attractive more of Our was recall were our margin XXXX and hedge for but net we exposed on not a the XXXX a we corn, we got all corn, to in we of quarter, little I maybe think

Europe, the operating some as energy higher Bulgaria us well. for opportunity, of an right, had had which XXXX, in speaking, in again frankly start-up over and with also also is costs We some in challenges Europe we

fourth As a you terms moved lot and the that got think we’ve XXXX that XXXX, Bulgarian us and should impacted Europe year, for then good us we’ve be hedge the well. know, bunch starches lot of Again, behind that be and for ran issues, a that those project, and natural also will up the position of in were in There sweeteners of in delta think takes the prices a plus we’ve we of we I through gas because believe that put put part ourselves--you over through flowed puts a in energy our costs of back know, and quarter. our segment. significantly so addressed in as that a

Adam Samuelson

for that the of really help and segment, a--you organic the I think over If know nutrition a the some is that? XXXX. little to M&A us XX%-plus and just through revenue that I business the within second help basis be average, specific switch you the gears half color Can growth. could expectations did maybe so areas the bit little bit Okay, and there was think helpful. to more where growth an in on about the talked contributions about a optimistic us you M&A than be segment XX%-plus parts business might might you profit below growth of and the that, XXXX, any

Juan Luciano

organic is still most the for XXXX be made, acquisitions Yes, to acquisitions an a of accretion the going growth will These on of later. be I The of not if are bit honest, to contribution little will. XXXX. think so happen basis, you

As the is just where nutrition the this we’ve recall, been so in ourselves importance areas are you. of we you business, building positioning strategic informing the

that why like an where PetDine. of we saying area food, always we and is did going no surprises, and that’s did have heard I we think think the you were policy to me health I we pet why that’s wellness invest, to and and Deerland

flavors in were why XX%-plus think why China, that’s organic powerful will, emerging When in why confidence of and invested and look pipeline more we that talked in beachhead the for that’s soy northern we and the our we maybe be in the international. I in Pinghu protein is which by markets, of part at we win Caribbean, proteins, you to are our business, and about plant-based Central in flavors, also continue but look. profit into gives capacity We is did operating we Fisa incredible Latin that’s if the we rates, growth us America. under-represented, we a acquired and to given honest, our us America, potential making how the about

our for increase, into without doubled year well. year, going XX%-plus to pipeline that so the digit XX%, guided operating the is rate rates way to and this long that’s and double to product just XX%, and the of growing they launches QX XX%, actually this I with a accelerate, touching Our the very business almost been from flat of next increase term our are growth, organic growth. again but have one to costs continue even for M&A at of other, because some stabilize we’re front-loaded basically, is fall, business the think win continues more the in We

Adam Samuelson

all it. you. I’ll helpful. on, pass it Got That’s really thank

Juan Luciano

Adam. you Thank

Operator

We question Credit I’ve Robert, line. opened Thank Moskow from have of now Robert a Suisse. you. your

Robert Moskow

great Hi, a thanks the congrats on and question, for year.

Ray Young

Robert. Thanks

Robert Moskow

this Maybe for how was Of Is corn of your sweeteners XXXX, result of and kind as fair went, can North you’re describe America that in pricing. like looks that already, implied a to you’ve corn in a profits kind sweeteners for guiding you assessment? what course. of pricing but negotiations flattish the it

Ray Young

assumption occurred and so to has our the objective I corn Yes really make Rob, we’ve course recently. costs the margins, through it’s fair negotiations, maintain maintain offset that that to higher of to think and an the is been margins able

into achieved that think go I as XXXX. assume we that’s we’ve objective, to and fair assumption a

Robert Moskow

it and demand achieving you expansion you the and of what kind would Okay, industry--the Is a the coming maybe follow-up, biodiesel, industry for of--is you’d is expected, the have watching for online growing all on is if driven results oil the refined renewal what expect? and capacity oil refineries, as demand it that been those having by soybean expect? of expansion planned

Juan Luciano

Yes, of eye course into close that. we a keep

understand and not execute. outpace to easy projects to announced but have this point world is even that are issues, in expansions, capacity in the You a reality continues also of this supply there to labor time, demand that at that shortages

confluence volume coming time, materials and of RGD, due we original other the drove happen, they’re now reasonable raw to that of reality that in way, the something a to timeline. to be bit look like world, point this either at the now term was have all look percentage it long so seen, but tend the basis able of XX% going that At supply to a battery when to to oils of our think two-thirds or from see around oil Rob, maybe a soybean and longer that will I happen. that little that, like have story, is in and happen that a or that--now, a palm up, and we’ve announcements you put on full that we oil way high you to I top oil. there demand that think going the for remember is the at to it’s We

in everything yes, So this at as closely, are we time, planned. is point this and at looking very evolving

Robert Moskow

Okay, all right. Thank you.

Juan Luciano

You’re welcome.

Operator

your open, Palmer Thank ahead. of is Morgan. go We JP you line now please have Tom, Robert. Tom

Tom Palmer

for and Good the the morning. Thank quarter. on you questions, congratulations

Ray Young

Tom. you Thank

Tom Palmer

just think pre-treatment can so have of half-weighted, online set-up I outlook, and timing for maybe noting is do least do although from I Maybe wave We larger portion for it still Rob, what’s a the products is with facilities terms follow needs with this impactful? assumption maybe of that as addition maybe specific at more Rob’s parties, that from, on have impact, the year, to question, or refined on a in little you of be units, on as up first coming and maybe XXXX. kind with capacity and about you’re least back you at just the sourcing how the think, thinking of were going much third products refined that won’t

Juan Luciano

a year we per X Yes around will to total XXXX. that we RGD believe Tom, billion capacity capacity listen of - incremental gallons continue gallons approach by billion and add

will from little maybe gotten point, global is as tightness, Sanoil news a bean important oil, faster telling As scenarios We but to announced seed We’ve reframe meal demand we expected these of than both several announced oil good for capacities was consumption explained have the before, capacity are growth the with analyze the growing I to Rob, from needs. do conditions, market help keep I and believe this. supply. we oil At availability so vegetable vegetable and also necessary black demand up in still this bit that continually and--.

and comments, the oil and pre-treat feedstock the intensity, based the a the the this will pricing the be regarding refining. could in required we vegetable see on so will of feedstock, end value So shift between oil crude reflect carbon likely value as in some

one. of we to and capture see is that movement some we very so so realize and far. at to this plants capture what early are the to going we’re sometimes sometimes formation, it are it’s are all developing closely another our going watching are biodiesel we place, need going in think we industry all how to refineries one of so and we’re good value we feel in we’re integrated But positioned, stages well about I that, the in the value

Tom Palmer

We It than or I’ll for there driver normalized bit weaker? but lysine with shortage you’re itself still resolve you like the a - of Is that. maybe I start year crushing to strong Maybe a with crush little you’re off the more see soy versus perhaps embedded? segue that something seems a around Is makes headlines that to a, maybe higher year? maybe quite side. see year. thank very margins conservatism for guiding you’re Great, guess, there to to margins, the expecting that is and crush environment, catalyst favorable starting off the

Juan Luciano

are cheapest and tight lot. beef near synthetic supporting time, XXXX. at and is soybean we so soybean SMDs very a the poultry many--of the so crush, very a the that record industry, grow large time side, are mentioned to going course, very, the protein There meal. forecasted we XXXX the Russian, Remember, still, continues record amino and and that’s the point as When back market carbohydrate, this the lysine corn may and proteins Yes, there pulling for well, and to energy takes. so. world, many meal production puts fat into that’s meal point demand one in this a meat But into to is be and is is look is in and at in a expensive and around today to balance expect demand acids, hog, later sustaining be that’s I soybean so beneficial

from more less and U.S. able also have strong Argentina, meal, soybean North of a don’t such a gain meal, and in the some maybe much for dynamics that I Argentina and also for stellar I to markets, forget meal competitive Europe. America when bodes crop think also, you think RGD exporter in well export in changing is the soybean making than soybean margins being crush

Tom Palmer

you. Thank

Juan Luciano

Tom. you Thank

Operator

is next from from you We go locally, ahead. Stanley. Andrews now unmuted have line Vincent your Vincent, and Morgan please the question ensure may

Steve Haynes

bio going solutions a Hi, of this on for maybe the and and that you’re and color to just annualized the how where of in those XXXX, Haynes on to question getting you some think more wins markets is about forward. if specific on the $XXX business ask Vincent. then end wins could provide million Steve Wanted revenue size

Juan Luciano

that business Yes, Listen, thank Steve. developing. for very are is you the question, we how about excited

past not recognized were while a business in that we and more watching we than customer push. think I it our pull almost was that the happened

to approach segment a have we Now, that.

creating and the construction that contribution we’re packaging, and people strong opportunities have some intentionality segment - very such, have plant market materials contribution important a of that personal a know, and would from are out growing, helping in these of from I you treatment. a pharma, contribution that say homecare, fermentation a base, We growing plant is as and a flourished. developing other strong from

success. So going we some to that and are but more continue well. more resources it’s There we segments, segments as these incipient, deploy tell, developed think larger and marketing as to that us you for very have continue can into are are of some some I segments

our so sometimes We as we growth on going to growth are working we’re up to trying [indiscernible] rate we’re that to and able is that the to faster product XX% having have. the soon capacity coming capacity, be more be mix sustain accommodate than this

Steve Haynes

Thank you.

Juan Luciano

You’re welcome.

Operator

you ready. when Vincent. Markets. BMO Thank ahead of Zaslow Ken, please have We now Ken Capital go you’re

Ken Zaslow

Hi, good morning everyone.

Juan Luciano

Ken. Morning

Ray Young

Hey Ken.

Ken Zaslow

to that a were Let at talk you happening did about of kind the day, me all your you going there be some cost headwinds. talk analyst approach. take just increasing that but think demand When your--you are about the the on structure different about and things side,

a see I analyst it day the the forward, where know, these they really you kind are going now, them thought or materializing are you be or of put they and bit frame they seem As to during they, XXXX, them way you lower headwinds than develop you’re to--you through look thought? can where are to and through don’t are extent, seeing little seeing how see and them were where you you they you you

Juan Luciano

potential of all and basically is would that. supply of some--the biggest the more perspective, inflation also that manifestation these at every that probably we accounted Europe, team as on where we reversion some whether solutions, we and and of chain say side positive We going and smaller of or impact negative products. When the scenarios, shaving the the that’s side company to some would see mechanisms be impact negative more several impact, estimate about. productivity for disruptions is from have is we some have side our time in is course and energy or efficiency I the the we the to dynamics energy that here, Yes, innovation percentages at we’ve you to inflation if working margins look develop. our were then inflation, their forecasted of say and that can at, labor talking hear I from and carb equation, have shortages, of on of that has some control, projects we growing as probably on you together course energy on and probably we will, put this in this, going Ken, and it’s point have, of timing, some and difficult increase, the the suffer crush been hedging that and an

winds. it more one-offs here more some energy territory it’s the nutrition to raw supply the that these at That’s more materials of complexity increase of more can of of the SKUs, that European On probably and the looking imagine, some and the exposed raw and supply and material you chain. of makes the side has business variety the more way on there we’re Nutrition, disruptions, as so that’s nutrition. chain -

Ken Zaslow

My appreciate question is--and second that. I

a about call How of in an going call appreciate demand demand. XXXX as there will relative was change, increased always. mix you be there before, the XXXX How in do out I of kind think know think time, China model? year terms and that’s be your for is will growing. of XXXX last outlined business how I your it do you demand? side, extraordinary to I think kind China the to you play On and

Juan Luciano

ASF, recovered from Yes, thank think has herd. you that Ken. the China Listen, they we recovered their

XXs top coming soybeans give and will a the here around the probably the [indiscernible] dynamics base they terms that believe pork a XX You and and versus or tons very said, take, industry. seen of probably the pre-ASF We XX, million will there, I that they down. import they number provide in prices saw - million of grain up you in way but good of be that think if it the correct little still bit, pre-pandemic. XX, corn, crushing XX capita strong, when are of meats XXXX, high feeding know, of challenges, but demand or a with through and even to million they we’ve practices. going are four we industry grow, moderation they it’s correct will increases, Even to we We we GDP, consumption the soybeans, diets million per and improved basically are still we be COVID for working professional still some by as continues XX supported see of to if XX managing corn. Again, and expect continue much and it bigger than

Ken Zaslow

guys. I you Great, it. Thank appreciate

Juan Luciano

Ken. you Thank

Operator

have Ben please from from ahead now go a when We Ken. ready. Baird. Kallo you Thank question Ben, you’re

Ben Kallo

see because talk you it’s Then on but ask diesel, tax legislative front, renewable guys your level, good could and a anything best I touched that. in taking you. broader environment Thank my around regulatory aviation the ethanol to Hi, morning fuel you on for how everyone, hate and comments, questions. maybe just but around thanks blender’s you evolving. on Ray, credit about the maybe guess, anyone’s just maybe the if

Ray Young

we’re credit form another are move or the doesn’t that we continues to seen the naturally the XXXX December optimistic both XXXX, the as so United for credit through BBB, know, agenda - something you’ve renewed. the way XX, industry important get it’s biodiesel gets at biodiesel, of legislation if it year. frankly, will as current until the of the on on parties see in - program the blender’s is, even on one extended so States, occur in we’re happening and supportive what’s blender’s through some historically on end you But of Yes, Washington the legislative whether looking what BBB

of recall, so you you we sometimes tax continue in the there biodiesel something credit, we’ve through the to you and the will blender’s have tax confident biodiesel it seen credit. after year order retroactive end a the of actually credit get feel which the If on occur happens that with past, in then kind

the to very aviation in fuel Again, this United going so industry. there’s support of to States part we’re is is green front, going we there’s - going and form a Europe, and here. SAF future important significant the with industry it’s that SAF in that the of [indiscernible] of frankly, sustainable something legislative be legislative--yes, of fuel, terms aviation projections fuel, on you few to of are in about that be form partners. we optimistic billion to nascent so the now, being it’s support the need support right On order SAF, of for terms level in a as be see the industry an gallons some It the fuel right combination be industry direction aviation required gallons XXXX, different this some as again, taken to working sustainable start in up right of now go will produced, actions know, some X industry of of but we’re show a probably growth by

Ben Kallo

watching? to the talked production areas you where side that about coming back diesel We you of discount facilities renewable the new any demand and the regions? about coming and about the demand talk online, supply regions Thank that already we And thanks could answers. could for but or there front, talk and you’re new you from, all how the you’re side seeing you, out incremental just know

Ray Young

meet demand that that there. by demand across particular LCFS Canada. United building the low out particularly the supply just and The implementing to the different extended in is states side states gets the LCFS frankly to respond fuel requirement there really towards frankly trying to The and it move carbon all as simply is by all driven demand starting standards, but industry the States west, standards, side the is standards, of

Ben Kallo

you. thank Great,

Operator

now We line. a Steve, you. Thank Steve have from your opened Bank Byrne from of question go I please have America. ahead,

Steve Byrne

billion you you. of oil renewable will gallons soybean think X thank diesel? Do the Yes, the feedstock represent this of majority for that

Ray Young

important of It’s part it. going to an represent

enough As from oil likely very demand sorts of it’s green for a even in a feedstocks, to the that But become green the eventually going maybe grows many part find pathway diesel, and pull will renewable to XX% require for about production still small come it’s growing will eventually of let’s I feedstock fact production canola believe component demand. insufficient order of renewable diesel. of that feedstocks, to it we cooking There’s amount oil, and fat not of, there’s meet say, that other in just rendering. an going soybean of out canola and important there, used this supply be because the oil referenced oil is types so just from to

Steve Byrne

that to going oil think exports export is mean get and acres happen. Does instead million RD, you into soybeans, XX% incremental XX is your soybean I Even don’t it squeezed and gets the meal? goes of which crushed, the out

Ray Young

you’re we believe correct. indicated exports down, soybean oil We’ve of that U.S. actually will lot come the a

soybean frankly, complex a I think on which, from around away supportive going there effect going is There the be to the be some oil. diversion oil daisy is for will exports goes entire diversion applications. actually of vegetable chain be that a There’s away to even world. from also food

that be this effects I order in are some going meet chain type think going demand. to on daisy is there to of

Steve Byrne

from oilseed production about America attribute uncertainty in XXXX, below you lower or that if to for or just there the farmers with is world and crop, you averages? in in Slide South either their net of that trading? show grain current matter, a are rest they you the where what rain, historical is then to your XX, And and seeing benefit forward that the drought being excessive that sales by Do

Juan Luciano

South is, in America America, Steve, what One second and of both the crop. farmer happened of at size looking you’re reflective see, in they this you is What as with is the the seeing impact things. are the is Juan. the current South from

our deliver populations and use In to chain for fulfill whether deliver it’s or ADM our try around we we we make nutrition to the is our the that of mission the world. around of and role world, sure not, terms that’s to our where to to customers beneficial supply providing

there not. margin around the the ADM, fact that that with to world, it some business, sometimes and in for it be demand of Sometimes coincides strong yes. parts expansion may We is like good tends the

Steve Byrne

Thank you.

Juan Luciano

You’re welcome.

Operator

We Michael Piken next Thank Cleveland Research. Michael, of have please you. now question ahead. from our go

Michael Piken

morning. Yes, good

of get system in outlook on the how sort back-up, the transportation business it take in fully are then it? flowing to what’s or sort and happening the the and What’s and is wanted hurricanes, backed Just over supports, and barge recovered system in New China. ports your the of up from the current is of both we kind Orleans, normally

Juan Luciano

Michael, question. Yes good

talk China. Let’s about

but There since impacting to seen kind but I boats highlights, line-ups soybean We’ve the agriculture of honest, the time we situation waiting China to improved. and Some a are main little corn continues about fertilizers bulk general got challenges increasing the maybe okay. in so delayed. in slight China or demurrage exporting importing is ports, days crop Brazil. in most and ports, would cargo have say bit is are be improve, Initially still average we situation port COVID-related the in has two, three for in

waiting North into We are and the times capacity seeing volume part. deliveries. for export from March-April XX most recovered XX in America double some for has days that’s of to pushing North seeing America maybe kind are more--we Brazil, maybe days

medium terms movement, if and I in a probably for the is term or of there conditions some slowed River, for the us. there freezing that recovered we at a that Illinois pre-idle repairments, was there and long lot plant think capacity have river, part, of the say continue. that, would export have I is icy the down will of is been most one term, least to see river that and lot you the has will, going levels, but to

Michael Piken

Great, that’s guys helpful. Then elevation margin as Thanks. the just outlook year? as it a you follow-up, see the what’s for

Juan Luciano

impact demand QX. QX, we We’re have to Ida seeing--as we supply, support the a didn’t to had of into but moved volume lot the ability have you that in of so know, was the we

as demand. seen to good we a increasing have We so how satisfy feel in elevation about little the QX, margins that expected, bit so

Michael Piken

you. Thank

Juan Luciano

welcome. You’re

Operator

you. Thank

comes Our Partners. Eric from of Research last question Seaport ahead. please Eric, go

Eric Larson

year Yes, for quarter. thank a you. Congrats Thanks on in great everyone. everybody. me squeezing Great

Juan Luciano

Thank you.

Eric Larson

very to so obviously beaten and it’s important, you--it’s if on the again of kind has this know been death I renewables.

just are renewable you take to the goal, that goal kind market, just get I your of with going that was to gallons, know is outlook look happen. comment, able feedstock that’s isn’t it’s--and of this for XX% lot XXXX positive production, look the green that If the diesel demand these term and the this. services of of feed if be to got be. to to think Is to Doesn’t billion of a XX all you to amount that’s at X Chris it of XX that it Doesn’t possible. globally functions, it alluded to long that just a just you’re earlier it’s equivalent this? soybean pull meet over increased--it’s I going which your--into million be--it Greg way to it at have this--it’s required makes acres right but very in a of ag acres what to global into market, will million resources

Juan Luciano

structural in food for and going has less, been think more a products. better those different explosion that assets between the utilization It requires environment. and value assets resources around company and assets would are we’re as more, one world, world, we a that that say us, going saying, also world for continue solve to certainly Eric, to around world those of as demand a when better come, and Ray we be in may issues. probably that be we shifts I has one demand to help maybe change try and the in these means in the from requires of to the import will to have was there the you of I Yes, place export

Eric Larson

with feel looks question already, clients? There’s for Obviously from of lot The have been current more so kind feel it’s the what stuff. lot farmer Good, are time, final input the have, corn not to answered crop the so we’re your year, I looks look markets those your what of to corn anymore, production the a and is of on production. costs it’s terms crop other get early--well, for uncertainty all when you U.S. how crop? What in and is close getting your today it this year by this well how the outlook bid in a like of we thanks. at hearing early in a production, putting

Juan Luciano

We expect planting. strong U.S. a

those at of Of those the American said, time decisions, and weather. South looking lot you are people make of course, to some it’s as the getting decisions, a

too strange is weather of Parana south are yield strong north a of bit in moment Brazil. in wet the Numbers in the the dry was and it is American South very in the terms and - at there coming or for little Brazil, north. very conditions Argentina, maybe

damage. soybeans I of prime the soybeans fertilizers the like XX Argentina but We about I the don’t about, think and I felt have recent that of probably of something the understand believe in million We or still deterioration corn maintain the so last year, that, with Brazil, probably the terms I in corn, acres, outpace stopped dynamics probably that think take. acres mix. know, prices having million will all the believe acres land probably the the U.S. Paraguay XX of same already of and think the think that in give crop even of I and will south rains we’d

Eric Larson

on a Yes, I year. again with you agree Thank great and would congratulations Juan, you.

Juan Luciano

Thank you. you Eric. Thank

Operator

to like it Vikram I hand you. Thank to Luthar some back would for remarks. closing

Vikram Luthar

in Thank Rika. XX joining Thank for be notes we Slide us you you participating. today. will upcoming investor which events

in questions. free ADM. up and for feel to any day me a other thanks Have As with have always, great time your please follow and you interest if

Operator

Thank you conclude everyone for joining. That call. does today’s

disconnect may lines a have day. lovely and You your

Archer-Daniels-Midland (ADM) 25 Jan 222021 Q4 Earnings call transcript